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According to Scamwatch, part of the Australian Competition and Consumer Commission, fraudsters are posing as financial service providers and loan brokers, setting up fraudulent websites and posting advertisements on social media platforms offering personal loans.
Once an application is submitted, victims are contacted by email or social media and sent a loan contract, before being asked to provide personal information and documents including photo ID, payslips, bank statements, and login details for bank and myGov accounts.
Applicants are then directed to pay an upfront fee for “payment protection” insurance or “loan establishment” costs before any funds are released. These payments must be made in full, often to a personal bank account, and are falsely claimed to be refundable after three months.
The warning states that scammers may impersonate existing Australian credit licence and financial service licence holders, sometimes using real ABN and licence details from ASIC to appear legitimate.
Anyone searching for a loan provider may encounter these scams, with people experiencing financial hardship identified as particularly vulnerable.
Scamwatch has outlined several warning signs:
- Communications that ask for your personal details and identification documents.
- Requests for upfront insurance payments that must be paid before loan funds are released.
- Requests to pay funds to a personal bank account.
- The loan provider is not licensed and does not appear on ASIC’s professional registers.
- The loan provider appears on ASIC’s investor alert list.
- Pressure to make payments and to pay in a particular way.
- Claims that insurance premium payments will be refunded after 3 months.
If affected, individuals are advised to contact their bank or card provider immediately, change compromised passwords, monitor accounts for unusual activity, and seek support through IDCARE on 1800 595 160. Incidents can also be reported to Scamwatch.
The warning comes as scam and fraud activity continues to rise across the lending sector.
Data from the Australian Bureau of Statistics shows an estimated 3.2 million Australians, or around one in seven people, experienced personal fraud in 2024–25.
This included 2.3 million people (10 per cent) affected by card fraud, nearly 600,000 (2.7 per cent) by scams, around 220,000 (1 per cent) by identity theft, and approximately 500,000 (2.3 per cent) by online impersonation.
Card fraud has increased from 5.9 per cent in 2014–15 to 10.4 per cent in 2024–25, while identity theft rose from 0.7 per cent to a peak of 1.2 per cent in 2023–24 before easing to 1 per cent.
An Equifax survey found three-quarters of brokers had been impacted by scams or fraud.
Separate data from Equifax shows Australian lenders prevented more than $1.5 billion in fraudulent financial applications in 2025, despite a rise in fraud attempts.
[Related: Broker fraud may be low, but the stakes are high]